For many homeowners, maintaining flood insurance is simply a condition of ownership.  A flood insurance policy is required by lenders for properties in areas that have been determined by the Federal government to be at high risk of flooding.   Buyers who obtain federally-guaranteed loans are usually required to obtain flood insurance if the property is in a high-risk flood zone.  Requiring a buyer to maintain a flood policy along with making payments on his mortgage ensures that the lender’s collateral will remain intact.  Insurance coverage will be there when needed to fund whatever repairs are necessary to restore a property to its pre-flood condition, or if that’s not possible, to replace it, if it is damaged or destroyed by water.  Homeowners who do not make repairs (for example, fail to replace a flooded HVAC system or to effectively remediate mold) may be in violation of local codes and subject to action by the locality where the property is located; they may also be in violation of the terms of their loan and could be subject to legal action by the holder of the mortgage.  

In Hampton Roads, where gorgeous waterways add to the quality of life, flooding can be a serious and perennial problem for many homeowners.  Recently the Hampton Roads area experienced two severe weather events that brought rainfall causing flooding in many locations.  All around the area, but especially in extremely low elevations (known as Special Flood Hazard Areas), properties have sustained serious damage which may take months to repair.  Although many homeowners in Special Flood Hazard Areas have flood insurance as a condition of financing, not all properties are financed (e.g. their loans are paid of, or they were transferred by cash payments or inheritance), and therefore many are not protected adequately, if at all.  Despite the fact that it seems clear that to go without coverage in these areas is extremely risky, there is no law requiring that owners purchase flood coverage, unless they have entered into a legal agreement, such as a mortgage, which requires it. 

In fact, it would be prudent for any homeowner, regardless of the elevation of the property owned, to purchase flood insurance.   Most of us are not aware of the facts, which speak for themselves: according to the National Association of Realtors, approximately 25 percent of flood insurance claims come from low- to-moderate flood risk areas.  Homeowners need to be aware that floods are not just the product of weather events affecting high-risk areas.  A flood is defined not only as the product of rain or storms.  Any inundation of two or more houses, or of two or more acres of normally dry land, constitutes a flood.  Floods can result from, but are not limited to, overflow of inland or tidal waters, runoff of surface waters, mudflow, or even backed-up storm drainage systems.  

The good news: you can be prepared in advance with the purchase of a flood policy.  For relatively little expense, if water inundates your house, you will be protected from the high cost and devastating impact of water damage.   It is important to realize that flood maps are changed over time to reflect changing risk assessments, based on the increase or lessening of the incidence of flooding.  You can get up to date information about your specific location by calling your city government office or contacting your National Flood Insurance Program State Coordinator (a list of state coordinators can be found at: www.floods.org/StatePOCs/stcoor.asp).  If your home is located in a low- to moderate flood risk area, you may even be eligible for a very inexpensive Preferred Risk Policy.  To learn more about flood insurance and flood risk in general, and to get more tips for homeowners, go to the federal government’s site, www.FloodSmart.gov 

NOTE: Information contained herein is general in nature.  Do not make financial, real estate, tax, or insurance decisions without consulting the appropriate expert.  Copyright 2010, Melissa Mason Hoffman.